Labour talks about student debt - but crisis debt is what really counts

Late last year, I met a 22-year-old woman who was being harassed by bailiffs over council tax debt.

She’d lived in three London boroughs in as many years. She’d moved, with her four-year-old child, to escape domestic violence. All three of the councils in those boroughs had chased her for unpaid council tax. She’d struggled to understand how to apply for council tax support. She couldn’t pay her council tax for the very simple reason that she had no money. That was the reason she got into debt in the first place. Repayment plans failed for exactly the same reason.

The equation was as straightforward as that. It usually is. Unfortunately, the fact that people have no money does not deter councils from throwing everything they have at trying to get it.

At the time I interviewed her, one of those councils was hard on the case, demanding around £360. Removal notices and visits from bailiffs were a feature of this woman’s life. I’m reading one of the 2016 removal notices now: "We have arranged for our enforcement team to call at your home this week where they may take control of your goods... These goods will be held for a period of five working days prior to being sold."

"I hide in the bedroom when [the bailiffs] come … or I try not to be at home," this woman told me. You could hardly blame her - there was plenty to hide from. Things were crashing all round as they so often do for people who most need help to get on track. This woman’s child tax credit money had suddenly stopped – probably, she thought, because of the Concentrix debacle. She also had problems with Universal Credit - she’d waited months to receive the housing component to pay her rent, because her landlord hadn’t given her the right tenancy papers. I attended a meeting where her jobcentre adviser argued against paying her the housing component because her letting agent’s name and landlord’s name didn’t match on her paperwork. The adviser wouldn’t talk to the letting agent to confirm the relationship between the agent and landlord, even though we got the letting agent on the phone then and there.

You see the point - people are hit from all angles.

Downward spiral

God only knows how many times I see this: people who already have nothing being pushed permanently into the red by bureaucracies that are equal parts punitive, dysfunctional and decimated by austerity. People are trapped in debt – to councils, courts, housing providers, landlords, anyone who loans them money, and the DWP. These people will never get out unless their debts are cleared.

I interview people with drug and alcohol problems, or who have severe mental health issues, or who have been in and out of prison, or who are single mums who, in some cases, have been through abusive relationships. They must rely on a public sector which demands money that people don’t have, or which places support further and further out of reach.

You may argue – plenty do these days – that people in these situations should simply pull themselves up by the bootstraps. I’d argue that pulling yourself up is almost impossible when you’re constantly slapped down and shoved further into poverty by organisations that should be helping you.

Put student debt and fees to one side for a minute. The sort of debts described in this post need as much attention. So do the people who have these debts. People in these situations are fighting unwinnable battles on too many fronts. There’s no obvious way for them to recover financially, or ever get ahead.

It doesn’t matter a damn if you, or people in Westminster who represent you, think people should just sort themselves out. The point is that they can’t. There are too many financial traps and not enough money. People aren’t able to get to a point where they can start afresh.

Staying housed, battling bailiffs, fighting councils for housing, sorting out benefit sanctions and paying rent arrears, fines and DWP loans really is a full time job. Benefits are constantly threatened and sanctioned by the DWP. Housing benefit and paying rent becomes a mess when people shift their claims to Universal Credit. People end up with rent arrears because their local housing allowance doesn’t cover their private sector rent. They are charged court costs for eviction and struggle to get council help for a new place. They work up rent arrears because they spend some of their monthly Universal Credit on a more immediate debt, or even - gasp - on a couple of hamburgers, or a bottle of booze, or whatever. You can see why people buy those things. Might as well 'splurge' (if splurge is the word for spending a fiver on a takeout) on occasional pleasures.

I see plenty of that sort of Why Not nihilism. I completely get it. So should everyone. A fiver here and there hardly matters when you owe your housing provider a grand or several hundred to the courts and you’re still going backwards. People are paying council tax arrears. They're paying back loans to the DWP which go on and on. The letters and demands pour through the door. They're in hock to the state and its providers forever. That’s the point. The system isn’t helping these people. It owns them. They can’t get out, because they’re not allowed out. It’s time that the political class stopped insisting they try.

Situation meltdown

The public sector systems that people must use to try and keep things afloat are in meltdown a lot of the time. I regularly meet people - especially at food banks - whose benefits are sanctioned. Quite often, they aren’t sure why their benefits were stopped, or how long they must wait until they restart. Unexplained variations in benefit payments are also a difficulty. The woman in this story didn’t know from week to week how much the DWP would deduct from her benefit for a loan repayment. All these issues can take ages to sort out because the bureaucracies running them have been cut to the bone. You can spend ages on hold when you ring councils or the DWP. Jobcentres rarely help solve people’s problems on the spot.

People are never going to get themselves out of these holes. They'll never clear their repayments, debts and loans. They'll never have the two, three, four, or five grand that they need to get back on track, even if they get work. The work people find is too low paid to make a meaningful dent.

These “systems” should be binned. Any politician can rattle on about ending austerity - and by god, politicians of all stripes do these days - but there needs to be more. People need a chance to restart. They also need to be noticed.

Labour has had much to say in recent months - not all of it coherent - about dealing with student fees and debt. I’m sure that's not at all a cynical ploy to attract younger voters.

I want to see vigorous rhetoric about writing off debts that are destroying people who are on benefits and who rely on the public sector. Dealing with these issues would mean showing a real commitment to groups of people who don’t always vote, or work, and who we've been strongly encouraged to dismiss. I wonder when their debts and costs will become a political priority.